UPDATE 3-Budget and reform plans put Ukraine on track for IMF aid, says G7
* Ukraine parliament has okayed IMF-backed budget changes
* IMF and G7 praise Kiev's zeal for reform despite war
* G7 powers see IMF board approving Ukraine bailout (Recasts with G7 on Ukraine budget)
By Stephen Brown and Susan Heavey
BERLIN/WASHINGTON, March 4 (Reuters) - The International Monetary Fund and Group of Seven leading economic powers on Wednesday praised the Ukrainian government's determination to reform the economy against all odds, with the G7 saying Kiev's new draft budget should put it on track for an IMF-led bailout.
Ukraine's parliament approved on Monday a raft of IMF-backed amendments to its 2015 draft budget that Kiev hopes will help it clinch a $17.5 billion bailout from the IMF, whose board is expected to meet next week.
IMF chief Christine Lagarde cautioned that what she called the "huge distraction" of fighting against pro-Russian rebels in eastern Ukraine complicated the provision of aid, but she was in no doubt that Kiev was now "really determined to reform".
The Fund has yet to approve the new package, and disbursing the next tranche of cash is partly contingent on the budget passing. But G7 ministers said they expected "a positive consideration of the Ukrainian programme" by the IMF board.
"This legislation makes significant progress toward implementing the prior actions on a new economic reform programme that will be supported by a four-year IMF Extended Fund Facility," said the Canadian, French, German, Italian, Japanese, British and U.S. finance ministers. Continued...